Thursday, August 30, 2007

More Financial Aid for Students

I saw an article about this in the Economist a couple of weeks ago and have been meaning to post about it. Luckily Congressman Costello saves me the trouble of writing it up: From an email the congressman just sent out:

The average student loan debt for a college graduate is currently around $18,000, and with consistently rising tuition rates, this number is sure to climb, burdening our college graduates with significant debt before they have the opportunity to establish themselves professionally. Such debt greatly affects purchasing power, making a house, a car, a family, and other key ingredients of the American Dream difficult to afford.

In a concerted effort to reduce this burden on our nation’s college graduates, the House of Representatives recently passed the College Cost Reduction Act, H.R. 2669. The bill cuts roughly $19 billion from federal lender subsidies and invests that money in financial aid programs for students, colleges, and universities.

The increases to student aid are quite significant. The bill increases the maximum Pell Grant award $500 over five years to $5,200, and raises the automatic qualification minimum income level to $30,000, thereby making it easier for students to qualify for such grants. An estimated 229,900 Illinois students would receive a Pell Grant increase of $500, while the average Illinois student would save $4,510 over the life of a four-year loan.

The bill also authorizes $500 million for the Perkins Loan Federal Contribution program over the next four fiscal years, and cuts interest rates in half for students with subsidized student loans.

Further, H.R. 2669 provides up to $16,000 in TEACH grants to students who commit to teaching a high-need subject in a high-need school for four years. Complete loan forgiveness is also available for public-sector employees after 10 years of service, and $5,000 in loan forgiveness is available for individuals who serve in critical areas such as law enforcement officers, firefighters, nurses, public defenders, early childhood educators and other public-sector employees.

The College Cost Reduction Act will help reduce the financial burden placed on college students and their families, which in turn will encourage more students to seek higher education. A final version of this bill is being crafted with the Senate and a final vote is expected this fall.